JSW Steel shares fall most on Sensex, Nifty as CLSA downgrades metal stock

Shares of JSW Steel Ltd were the top losers on Sensex and Nifty today after global brokerage CLSA downgraded the stock to sell from underperform. The brokerage trimmed its target price to Rs 730 from Rs 810.

The metal sector stock slipped 3% to Rs 818.65 against the previous close of Rs 844.25 in early deals. A total of 0.24 lakh shares of the firm changed hands amounting to a turnover of Rs 2.01 crore on BSE.

JSW Steel stock has clocked 20% returns in a year. This year, the stock is down 6.39%.

On Nifty, the stock fell 3.13% to Rs 818.50 against the previous close of Rs 844.95. Market cap of the firm fell to Rs 2.02 lakh crore.

Brokerage Prabhudas Lilladher has a buy call on JSW Steel with a target price of Rs 958.

"We believe JSTL with its superior execution skills will be key beneficiary of strong domestic demand scenario over the next few years. We expect Revenue/EBITDA/PAT growth of 15%/30%/72% over FY23-26E. The stock is trading at 7.6x/6.1x EV of FY25E/FY26E EBITDA. Retain ‘Buy’ rating with revised target price of Rs 958 (earlier Rs 992) valuing at 7x EV of Mar’26E EBITDA," said the brokerage.

The stock hit a record high of Rs 895.60 on December 28, 2023 and a 52 week low of Rs 649.75 on March 16, 2023.

JSW Steel reported a stellar set of earnings in Q3. Consolidated net profit zoomed five times to Rs 2,415 crore in the December 2023 quarter. Consolidated revenue from operations surged 7.2 per cent year-on-year (YoY) to Rs 41,940 crore during the third quarter.

In terms of technicals, the relative strength index (RSI) of the stock stands at 60, signaling it's trading neither in the overbought nor in the oversold zone. The stock is trading higher than the 10 day, 20 day, 50 day 100 day, 150 day and 200 day moving averages.

EBITDA fell 9% to Rs 7,180 crore in Q3 sequentially and EBITDA margin in the December 2023 quarter stood at 17.1 per cent. Steel sales rose 7 per cent YoY to 6MT and domestic sales were up 2% (YoY) to 5.27 MT.